The deficit in shareholders’ equity of Kardan N.V. increased from a deficit of €150.6 million as of December 31, 2019
to a deficit of €209.2 million as of September 30, 2020, primarily due to the loss in the period.
Negotiations with debenture holders
Since the Company did not repay the principal and interest payments which were due in February 2018, 2019 and 2020, the Company is in default according to the Deeds of Trust as of February 2018.
Accordingly, as of March 31,
2018 and until the repayments to the Debenture Holders are rescheduled, the debentures are presented as current liabilities and bear interest in arrears.
Management continues to advance the negotiations with the representatives of the debenture holders and hopes to reach a debt settlement in the coming months.
The framework of the debt settlement is based on conversion of a
portion of the debt into the Company’s shares which will grant the control over the Company to the Debenture Holders.
Such settlement is not final and is subject to various approvals, including the approval of Kardan’s shareholders in a general meeting and the approval of the Debenture Holders. The Company intends to convene a
general meeting of shareholders in the coming weeks and to present the proposed settlement and seek approval onthe various actions the Company will need to take, that require the approval of the shareholders. However, as of the
date of this report, there is no certainty regarding reaching such agreement, its terms, and/or the date of its approval.
As part of the understanding reached between the Company and the Debenture holders (series A and Series B), in
November 2020, as part of the balance payment to debentures series B, the Company made a partial payment of
the accrued interest of approximately €7.5 million (NIS 29.5 million).